Iraq scandal: former AWB boss fined

THE most senior executive at AWB when the wheat exporter paid $US230 million in kickbacks to the Iraqi regime of Saddam Hussein has sent a clear warning to other businesses to be ''very careful'' in their dealings with Third World countries.

Former chief executive Andrew Lindberg issued the warning yesterday after a judge approved a deal struck with the corporate regulator that means he will pay a $100,000 penalty and accept a ban from corporate life until September 2014.

While for Mr Lindberg, yesterday's ruling represented the end of what he described as a 6½-year ''ordeal'', the saga continues for other former AWB executives who face similar civil lawsuits brought by the Australian Securities and Investments Commission over their alleged involvement in AWB's scheme to avoid United Nations rules barring direct payments to the Hussein regime.

''In any market, particularly overseas, when you deal with the Third World countries, you've got to be very careful, and it's perhaps easier than you think to make mistakes,'' Mr Lindberg said outside court.

''I accept completely the judgment of the court,'' he said. ''It's been a long ordeal - 6½ years.

''I've never resiled from my responsibilities and I don't do it now, and I just want to get on with my life and do what I can.''

Mr Lindberg admitted to four breaches of the Corporations Act. They do not relate to AWB's payment of kickbacks to shore up lucrative wheat sales to Iraq before the country was invaded by US-led forces in 2003, but rather his failure afterwards to properly investigate breaches of the UN oil-for-food program rules and bring them to the attention of the company's board.

Approving the agreement between Mr Lindberg and ASIC yesterday and bringing an end to the civil case, Victorian Supreme Court Justice Ross Robson said that the proposed penalty was ''at the upper end of the range''.

Justice Robson said the breaches were serious but ''do not involve any moral turpitude, deliberately seeking limited advice, or deliberate decisions to misinform the board'' of AWB.

Mr Lindberg's is one of six civil proceedings ASIC brought in 2007 against AWB executives over the oil-for-food scandal.

The other five proceedings were stayed while a taskforce, including ASIC, investigated the possibility of laying criminal charges.

In 2009, the Australian Federal Police terminated the taskforce, and in 2010 ASIC told the court it would not be pursuing criminal charges, triggering the resumption of the civil cases.

Justice Robson will today rule on a deal struck with ASIC by one of the executives, former chief financial officer Paul Ingleby, who acknowledged breaches of his duties to the company in June and agreed to pay a penalty of $40,000 and disqualification as a director for 15 months.

The cases against former chairman Trevor Flugge, former group general manager of trading Peter Geary, and two former general managers of international sales and marketing, Charles Stott and Michael Long, are pending.